A South Korean court has ordered gaming tycoon Kwon Hyuk-bin, founder of Smilegate, to transfer assets worth about 2.55 trillion won ($1.87 billion) to his wife in what could become the largest divorce settlement in the country’s history.
Court awards 35% stake in Smilegate
The Seoul Family Court ruled that Kwon must transfer 35% of his shares in Smilegate to his wife, Lee, along with 65 billion won in cash.
The shares were valued at roughly 2.5 trillion won, bringing the total property division to about 2.55 trillion won. Because Smilegate is wholly owned by Kwon, the ruling represents a significant transfer of ownership in one of South Korea’s major privately held gaming companies.
The court’s decision came in a divorce case filed by Lee in November 2022. Both sides can still challenge the ruling.
A marriage that began before Smilegate
Kwon and Lee married in 2001, a year before Kwon founded Smilegate in 2002.
The company went on to become one of South Korea’s leading game developers, with internationally successful titles including CrossFire, Lost Ark and Epic Seven. Kwon became one of the country’s wealthiest technology entrepreneurs, with Bloomberg estimating his fortune at around $3 billion.
Lee argued that she contributed to the company’s early development and helped support the family while Kwon built his business empire. Her legal team had sought a 50% stake in Smilegate.
Dispute over contributions to the company
The case centred partly on how much credit should be given to Lee for the creation and growth of Smilegate.
Lee’s side argued that she had helped finance the company when it was founded and had been involved in its early management. She also pointed to more than two decades spent raising the couple’s children and managing their household.
Smilegate, however, has maintained that Kwon provided all of the company’s initial capital. The company has also sought to distinguish Lee’s personal role from Kwon’s work in building the business.
The court ultimately recognised a substantial marital-property claim, ordering Kwon to transfer more than a third of his ownership stake.
Settlement more than doubles previous Korean record
The ruling eclipses South Korea’s previous record divorce settlement by a wide margin.
In July, a Seoul appeals court ordered SK Group Chairman Chey Tae-won to pay his former wife, Roh Soh-yeong, 944 billion won, or roughly $644 million at the time. That ruling itself followed years of litigation and had been described as South Korea’s biggest divorce settlement.
Kwon’s settlement of 2.55 trillion won is more than twice that amount, making the Smilegate case an extraordinary milestone in South Korean family law.
Could reshape Smilegate’s ownership
The ruling could have consequences beyond the couple’s personal finances.
The transfer of a 35% stake would make Lee a major shareholder in Smilegate, potentially introducing a new dynamic into the governance of the gaming company. Seoul Economic Daily reported that Kwon’s control as chief visionary officer would remain intact, but the new ownership structure could create the possibility of future shareholder disputes.
For Kwon, the ruling represents a major reduction in his ownership of the company he founded. For Lee, it provides a substantial financial and corporate stake following a long-running dispute over her contribution to the family’s wealth.
A landmark case for South Korean divorce law
The case also highlights growing scrutiny of how South Korean courts value contributions made by spouses who may not have played a conventional corporate role.
The dispute involving Kwon follows the highly publicised divorce battle between Chey Tae-won and Roh Soh-yeong, where courts have also wrestled with questions about how marital contributions should be assessed and whether company shares should be considered part of divisible assets.
With Kwon’s ruling now setting a new benchmark, the case is likely to attract further attention as both parties consider whether to challenge the decision.
Sources
- Yonhap News Agency — Court orders Smilegate founder to pay wife record 2.55 trillion won
- BBC report via MyJoyOnline — Tycoon to pay ex-wife $1.87bn in record South Korea divorce settlement
- Seoul Economic Daily — Court orders Smilegate founder to give wife 35% stake
- Reuters — SK Group’s Chey accepts part of divorce settlement
- Forbes — SK Hynix billionaire’s previous record divorce settlement
